, NEW YORK, May 21 – Facebook shares plunged more than eight percent below the IPO price of $38 in opening trade on Monday, after fizzling in their debut on Friday.
Ten minutes into opening trade, the shares were changing hands at $35.01, down 8.43 percent, while the markets generally rose.
After Friday’s much-anticipated $16 billion initial public offering, the second largest ever of any US company, underwriters were forced to prop up the shares to keep them from falling below the issue price.
“I think that the underwriters convinced Facebook to offer too much stock,” said analyst Michael Pachter of Wedbush Securities after Friday’s flat opening.
“The market didn’t have sufficient appetite for the number of shares offered.”